Question

MaryKay wants to identify her monthly variable expenses to see if they are more than 40% of her monthly income. MaryKay's monthly income is $3,800. Her net income is 7% of her monthly income and her fixed expenses are $1,824. Determine the total of MaryKay's variable expenses and if they are more than 40% of her monthly income.
a.
MaryKay's variable expenses total $1,710, which is more than 40% of her monthly income.
b.
MaryKay's variable expenses total $1,976, which is more than 40% of her monthly income.
c.
MaryKay's variable expenses total $266, which is less than 40% of her monthly income.
d.
MaryKay's variable expenses total $1,740, which is more than 40% of her monthly income.


Please select the best answer from the choices provided.

A
B
C
D

Answer 1

A

Work:
- Net income = 7% of 3,800 = 0.07 × 3,800 = 266
- Variable expenses = 3,800 − 1,824 − 266 = 1,710
- 40% of 3,800 = 0.40 × 3,800 = 1,520, and 1,710 > 1,520

So option A is correct.